Knowledge Gaps on Innovation for Green Growth

Small but sometimes radical new steps toward greener energy and green growth are happening on our stressed planet, but we don’t hear enough about them, nor do we sufficiently explore and share policy lessons.

Examples include ‘smart grid’ R&D activities that deploy sensors to gather data on incoming electricity from wind, solar and other renewables with varying power outputs, better management of outages, factoring in the needs of electric vehicles, and installing more energy-efficient power meter usage in homes and offices. At the other end of the spectrum, Husk Power Systems, a company operating in Bihar, India has devised a novel single fuel gasifier for rural electrification based on discarded rice husks – one of India’s most common waste products. Thanks to the risk husks, 60 mini-power plants have now been installed. They power about 25,000 households in more than 250 villages in rural India.

These extreme examples of innovation for greener growth raise a number of policy questions. As with all other technologies, green technologies are characterized by market failures in the creation, dissemination and absorption of knowledge by firms – which provide a rationale for public policies. In addition, green technologies are also characterized by environmental externalities. How do knowledge and environmental market failures affect the appropriate mix of public policies in developing countries with differing natural and human capital endowments, industrial structures, technological capabilities, and business environments? And what should be the relative policy priorities for promoting frontier (new-to-the-world) versus catch-up (new-to-the-firm) green innovations in different developing country settings?

To help identify priorities for policy-related knowledge-building and implementation work, scholars and practitioners got together at the inaugural GGKP (Green Growth Knowledge Platform) conference on January 12-13, 2012 in Mexico City; see GGKP.org for the agenda, papers, and outcomes. Green innovation was one of the key themes. Participants in Mexico City reached a broad consensus regarding needed follow-on work – it was agreed that green growth is inconceivable without innovation. A recent Policy Research Working Paper provides an overview of our existing state of knowledge on green innovation policies.

Four leading topics arose at our Mexico City event:

Spillovers. It took a long time for aircraft jet engines to diffuse and be adapted as stationary gas turbines for electric power generation, but yet the spillovers occurred. How large are spillovers from brown to green technologies, and how can they best be accelerated? If there are few spillovers, green innovators cannot “build on the shoulders of brown giants” but need to rebuild a distinct knowledge base – so green innovation may need lots of support. If, on the other hand, there are significant spillovers across technology fields (if knowledge across fields is cumulative), there would be less reason to specifically support green innovation, since promoting innovation in general – including upgrading skills – should mostly do the trick, in combination with carbon taxes and other demand-pull policies to tackle environmental externalities. How much does this depend on whether the required green innovations are predominantly radical or incremental?

Base-of-pyramid innovation. BoP innovations are innovations to meet the needs of the poor – to create more (products) with less (resources) for more (people). They include innovations both by global and local private companies, and by local informal grassroots inventors largely through improvisation and experimentation. Examples of green BoP innovations include higher-yield seeds for drought-prone and saline soils, cleaner indoor non-electric cooking stoves, and rural rainwater harvesting systems. None of these green innovations have been sufficiently scaled up yet. What are the most important barriers to the creation, diffusion and adoption of green BoP innovations, and what are the best ways to overcome these barriers?

Picking winners. Policy-induced prices reflecting the environmental externalities (including appropriate carbon taxes) appear to be the most important green innovation policy, but are typically difficult to implement, at the technical and most importantly at the political level. Since technology-neutral pricing of the externalities is not “sufficient”, what are the best ways to direct technological change while avoiding the costs of “picking winners”? How best to support a portfolio of green technologies to diversify the risk of “getting it wrong”? How best to support “local general purpose technologies” which may complement a variety of green growth strategies?

Leapfrogging. Developing countries may be able to skip some of the dirty stages of development experienced by industrialized countries. As an example, an expanding developing country city could avoid the urban sprawl and more environmentally costly transport and energy networks, and rather develop in a more geographically compact and energy-efficient approach guided by appropriate zoning and complementary policies. Which technologies best allow skipping to a greener growth path, and what are the required support policies?

More generally, what are the most important unresolved “how to” issues regarding the creation of new green technologies, and the diffusion, adaptation to local context and new use of existing green technologies in your countries? What other topics linking frontier and catch-up innovation to green growth should the GGKP focus on? INSPIRE US! We would like to hear from you.

Comments

Knowledge gaps..- using local test beds
Dear Sir/Madam;
There are lots of local Universities with potential to be used as labs; so why not make greater use of such opportunities?
As I understand:
1)The initial investment in R&D is typically very high - so this could be solved through more widely shared and lower local test bed costs.
2)Lower-cost local workers for local adaptation/installation can learn to produce at an acceptable standard, at relatively low cost.
3)Foreign marketeers have a tendency not take adequate local needs and responsibilities into account: when we have a test bed near our local market, it is easier to share information so among others we ensure better accountability.
Kind regards;
Md.Moshfaqur Rahman

Yes, by all means, local universities can in principle serve as effective testbeds for experimentation and testing of new technologies and for facilitating the extension of existing technologies to the local context -- thanks for your comment. However, while there have have been many pronouncements and programs trying to create effective local university-industry linkages, it has proved challenging to do so in practice in a cost-effective and sustainable manner that delivers concrete results on the ground. But there must be some specific examples out there of using local universities as testbeds for green innovations. It would be particularly interesting to hear of government support policies in this area that have benefited from rigorous monitoring and evaluation, where we could point to the cost-benefit impact of the intervention relative to what would have transpired absent public intervention. Any such examples out there for us all to learn from?
Mark

The major challenge in the green energy innovation is the innovations not being spread around for implementation for reasons whatever it could be. For example, the implementation and spread of solar energy in India is far far insignificant to the vastness of its potential. The reason being many inadequate govt. policy provisions, discouraging credit terms by banks, lack of awareness on the technological advancements and consequential disinclination for changeover to green energy systems, want of expertise and higher costs of implementation with local made systems.
Away from this point I in general feel that we should have an exclusive university in every country that spread the knowledge and specialization of green energy systems and connects its research knowledge with industry expertise. This in turn will produce specialists in the arena and obviously increase the implementation of green energy systems.
Venkata
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